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Wannaretireearly wrote: ↑Tue Mar 28, 2023 2:34 pm We’re in the process of updating estate plan, will, healthcare directive etc. Nothing major. With legal insurance this will be around $100.

However, I’m worried if my family has to execute on the estate plan they will be lost, and potentially taken to the cleaners. The only advice my estate lawyer gave was ‘we don’t deal with that side, your family would have to hire a lawyer."

In that case, you may not have gotten your $100 worth.

$35 million is definitely high net worth, but any firm with a good trusts and estates practice should have many clients at that level or higher. One prominent trusts and estates lawyer recently referred to that level as "middle rich," meaning that a couple at that level may not want to give away their $25,840,000 estate and gift tax exclusion amounts now to use them in case the exclusion amount reverts to pre-2018 law in 2026 as scheduled. Prenuptial agreements are sometimes done by trusts and estates lawyers and sometimes by matrimonial lawyers. I think trusts and estates lawyers draft more precisely, and I find it easier when doing them if the lawyer on the other side is also a trusts and estates lawyer. However, on larger ones,...

... Forum rules prohibit discussion of future legislation or politics, but I truly believe that 24% tax for MFJ up to about $393k of gross income, 15% on most of your dividends, plus 3.8% on a relatively small portion of your income, is a tax regime we will look back on wistfully someday soon. However, we may discuss the fact that under the law as it now exists, the tax rates are scheduled to revert to pre-2018 levels in 2026, and the joint return brackets that were widened for 2018-2025 are scheduled to revert to pre-2018 width in 2026, in each case adjusted for inflation. I discussed the point about the extent of the 24% bracket, and how it gives some IRA owners a window in which to do conversions at 24% or less, in my article in the Jun...

We don’t have many estates with revocable trusts but when we do sometimes it’s beneficial to make a Section 645 election to get a larger exemption, a fiscal year, and no estimated tax for the first two years. But sometimes it’s not since it could subject the trust to state income tax in the decedent’s home state when it might not otherwise be.

Your lawyer should advise you as to whether it would be beneficial in your particular case.

... Scenario 2 : On the opposite end of the spectrum, all goes well and I live another 30-50 years (to age 80-100). In this case--much less dire--our current holdings double a few times, we receive expected inheritances on both sides, my grandmother's trust passes to me as expected (holding private/illiquid assets), etc. and the total exceeds whatever the estate tax threshold is in 2053-2073. If the WL policy rises from $1.5 mm in cash payout to whatever the death benefit plus paid-up additions are at that time, it can help cover those estate taxes for whomever will benefit. This is a less concerning scenario to me--by a lot--but it could be helpful to someone at some point. ... Most of that is easy to fix. You could ask your parents to ch...

... Scenario 2 : On the opposite end of the spectrum, all goes well and I live another 30-50 years (to age 80-100). In this case--much less dire--our current holdings double a few times, we receive expected inheritances on both sides, my grandmother's trust passes to me as expected (holding private/illiquid assets), etc. and the total exceeds whatever the estate tax threshold is in 2053-2073. If the WL policy rises from $1.5 mm in cash payout to whatever the death benefit plus paid-up additions are at that time, it can help cover those estate taxes for whomever will benefit. This is a less concerning scenario to me--by a lot--but it could be helpful to someone at some point. ... Most of that is easy to fix. You could ask your parents to ch...

Can the executor claim the entire account and then distribute it? In NY the executor (if still living) could get a new certificate from the court for $6 regardless of how much time had passed.

the court order request is fom the broker. the lawyer i talked to say the will and trust clealy state assets go to my mom and thus no need fo a cout order. They don’t go to her all by themselves. Since they held it as tenants in common they each had an undivided one-half interest. Upon his death his one-half interest became an asset of his estate. Except if the small estate procedure applies, his executors and she will direct the broker to divide the account into separate accounts, one in her name and one in the name of his estate. His executors (after paying any debts, taxes, expenses and preresiduary bequests) will then distribute the remaining assets in accordance with the Will, in this case to her. The court won’t say who gets what, bu...

Lee_WSP wrote: ↑Fri Mar 24, 2023 4:39 pm T & E attorney here. The answer is still no.

You have liquid investments which are easily divided up to pay any transfer tax, plus there are better ways to pay less transfer tax.

You would need an illiquid family business which cannot be sold or a need for a buy/sell payout for universal life to make any sense.

Even if you have an illiquid business, the insurance only works if you expect to sell it or take it public in the intermediate term. Otherwise, if you live to life expectancy, you will have reduced your liquidity since you would have substantially more money if you instead invested the amount of the insurance premiums and earned an average or average minus return on your money.

You and the trust can amend the returns for the open years (2019, 2020 and 2021). You and the trust should file correct returns for 2022 and subsequent years. Are your parents living? If so, is the trust, or the portion of the trust attributable to whichever parent is a sibling of your uncle, a grantor trust? It's possible that it's not, but more often that not trusts whose grantors are living are grantor trusts. If it's a grantor trust, then the income and gains would be taxable to your parents. Depending on what state you're in, and what if any state(s) the trust is taxable (you should check this since different states have different rules for when a trust is taxable in that state), the trust's tax rate on capital gains may not be much hi...

bengal22 wrote: ↑Thu Mar 23, 2023 6:29 pm …
In my mother's case she had everything set up TOD among 3 of us and we did not even file with the probate court. It was a $1 million estate.
…

With 3 children there’s a reasonable chance that at least one child will get divorced, outlive his/her spouse and remarry, do well and have a taxable estate, have a creditor problem, or go into a nursing home and want Medicaid.

You have to decide whether it’s worth the cost to protect against these possibilities.

I hope this thread serves as a cautionary tale to those who say "well, probate isn't so bad." For an older relative, especially an ill, older relative, consider a revocable living trust. I did that for the last couple of older relatives not long after they were diagnosed with terminal illnesses. For the last one I paid ~$2,500 back in 2018 to an eldercare lawyer for a revocable living trust, pour-over will, financial and health care POAs. ... A trusts and estates lawyer would probably be a better fit for this. Our lawyer charged $3,800 for a probate we just opened. It is also a simple $60,000 estate (all Ibonds). Basically, nothing else. The fee supposedly includes everything, including all filing, notices, etc. It will probably ...

Lee_WSP wrote: ↑Thu Mar 23, 2023 12:56 pm ...
I have no idea how prevalent not updating designations is, but I’d guess it’s pretty common. I’m referring to the cause when it does happen. In other words, forgetting is usually the reason it isn’t updated.
...

It is indeed common for people not to update beneficiary designations when updating their estate plans.

Even more common now that TOD designations exist for brokerage accounts is for brokers to have clients to sign TOD designations that are inconsistent with their estate plans.

Typically, a tenancy in common will not avoid probate. This is because a co-tenant's ownership interest remains part of their estate when they die. It must be distributed by will or according to state laws of intestate succession. Joint tenants with right of survivorship (JTWROS) would have been a better choice for the original setup. When the estate tax exclusion amount was lower (it was $675,000 in 2001), and there was no portability (portability didn't exist until 2011, and didn't become permanent until 2013), most couples divided their assets so that each spouse would have assets of at least the estate tax exclusion amount in his/her own name. Dividing joint tenancies into tenants in common was a common way of doing that since the form...

The lawyer who handles your estate planning should be able to find out who does Social Security disability appeals in your area.

Since the fees are limited, anything you can do that will reduce the amount of time the lawyer has to spend on the case will be helpful. You can get the medical records from the doctors. Someone I know who filed an appeal had two lawyers in her family, and one did the research and found the relevant cases, and the other, who was a litigator, prepared a brief for the lawyer handling the case (who couldn't do this given the limit on his fees) to use (after reviewing it and making whatever changes he wanted).

Crime has dropped substantially over the last 30 years in the United States.

muitu wrote: ↑Wed Mar 22, 2023 12:38 pm ...

The LTC policy was more for LTC benefits than death benefit, however the death benefit was also a key factor they said. The attorney said they won't receive Medicaid because their income is too high. ...

If that's the case, then what was the purpose of all of this? Also, do they need life insurance?

Murdock7591 wrote: ↑Tue Mar 21, 2023 10:01 pm Make some phone calls. I paid $3,999 for my brother's estate and had an excellent probate attorney.

Was that to administer the estate or just to probate the Will?

The child’s co-trustee may be related. The restriction only applies to a replacement trustee when the child removes and replaces a trustee.

Instead of doing this piecemeal, it would be easier if you found a good trusts and estates lawyer for whom preparing Wills in which you provide for your children in flexible discretionary trusts would be a routine matter.

Some of the work is the same regardless of the size of the estate. Except in states like Florida and California where the limit for the small estate procedure is greater than $60,000, it's the same work to probate the Will in a $60,000 estate as in a $60 million estate. It's the same work to get an employer identification number in a $60,000 estate as in a $60 million estate. I think most lawyers would turn down a $60,000 estate, and many would turn down a $600,000 estate. There isn't much upside, and there's a good chance the result will be as you describe, which won't help the relationship with the client or the referral source.

It depends on how much time you need in the decision making process, probably including in most cases the time the lawyer has to spend explaining why not to name beneficiaries on taxable accounts. Okay, you piqued my curiosity. Why not? They get a stepped-up cost basis so no tax is involved. As Lee pointed out, it's difficult to provide for contingencies such as a child predeceasing you in TOD designations. Our clients almost always provide for their beneficiaries in trust rather than outright, to keep their inheritances out of their estates, and to protect against their creditors and spouses, and Medicaid. It's difficult to do that with TOD designations. What if, as a result of TOD designations, your estate doesn't have enough money to pa...

Either way is fine. It's more efficient if you do it in your Will, but sometimes (as in this case) the parent's lawyer isn't able to do it. Other times the parent doesn't want to pay for it (though it doesn't cost much more to do a Will providing for children in trust rather than outright). in those cases, if we represent the child, we do as you suggest and create a trust into which the parent can leave the child's share. Another possiblity, if we represent the child, is to give the parent's lawyer the appropriate provisions to insert in the parent's Will. In this case, there could be a couple of an additional benefits if you included it in your Will. Limiting distributions to health, maintenance, support and education as your daughter sugg...

AAA wrote: ↑Tue Mar 21, 2023 5:53 pm If I can ask a related question - what would be a reasonable fee for a lawyer to create a standard will, health care proxy and power of attorney for someone with straightforward, non-business assets and all financial accounts already have named beneficiaries?

It depends on how much time you need in the decision making process, probably including in most cases the time the lawyer has to spend explaining why not to name beneficiaries on taxable accounts.

... I am a first-time home buyer in an early stage of the process. I found on Zillow a condominium I liked and contacted an agent who made an appointment with the selling agent and then showed to me the condo. Everything was fine until, after the showing, the agent sent me a draft buyer agreement. I described the issues here: https://www.bogleheads.org/forum/viewtopic.php?p=7174850#p7174850 . I decided to find a real estate lawyer who would review and negotiate my agreement with an agent. Finding a lawyer was (is) next to impossible. In Washington, D.C., it is not required to use a RE lawyer and most people don't. Thus, there are no advertisements or other sources where I could look for a lawyer. A local publication Washingtonian has a lis...

Is there a scenario where a dividend focused strategy is rational? IF I were the beneficiary of a trust where I could spend the income but not touch the principal, I'd probably want the principal in a dividend focused fund. I'm not, so I prefer not to receive dividends. Good point, although many trusts do allow the beneficiary to take limited principal withdrawals. This would seemingly take one back to perhaps wanting a total return approach, especially if the income beneficiary is the remainder beneficiary. The best practice is generally to give the trustees discretion to distribute income and principal for any reason, or to accumulate the income. However, occasionally a trust limits or prohibits principal distributions, particularly wher...

Rex66 wrote: ↑Mon Mar 20, 2023 4:56 am This is not going to work out well unless you die prematurely compared to rating.

…

you almost certainly can avoid a tax problem if you wanted. Do that instead. Keep in mind a taxable account also gets a step up in basis at death. Only the irrevocable trust makes WL free from estate taxes and not the WL itself.
…

If the trustees invested the same amount in other assets the trust would probably end up with much more money, also out of the estate.

Have your inheritances come to you and your spouse in trust rather than outright to keep them out of your estates.

Assuming you live an average length of time the insurance will reduce your estate (and hence your estate tax) by shifting wealth to the insurance company and the insurance agent.

Freetime76 wrote: ↑Sun Mar 19, 2023 12:21 pm ...
Another thing, if you’re really into it: you can go back through a prospective realtor’s prior listings and see how much the initial list was vs sold price (history on websites like Zillow, you won’t be able to see seller concessions like closing costs, but you can get an idea). How did they do? If you want a buyer’s agent, then see what types of homes they were involved in.

Note that some brokers mainly get listings, and some brokers mainly sell houses that others have listed.

Perhaps a bank or trust company, though they’ll probably prefer to be a trustee of a revocable trust rather than an agent under a power of attorney.

There are also bookkeeper types (they call themselves daily money managers) who do bill paying.

bluebolt wrote: ↑Sat Mar 18, 2023 7:23 pm

Shackleton wrote: ↑Thu Mar 16, 2023 8:56 pm In most areas, you do not have to be a licensed realtor to sell your own home or act on your own behalf when purchasing a home. You may need a real estate attorney depending on the state.

But I do question why you think it was the realtor’s fault that you purchased a house you don’t like…

Are there really places where you can't do FSBO?

You may sell your property yourself. You wouldn't be acting as a broker or agent for anyone. You would be the principal.

But some sellers can't find a buyer on their own, and need a broker to find a buyer, or don't want to deal with selling it themselves.

... I am a first-time home buyer in an early stage of the process. I found on Zillow a condominium I liked and contacted an agent who made an appointment with the selling agent and then showed to me the condo. Everything was fine until, after the showing, the agent sent me a draft buyer agreement. I described the issues here: https://www.bogleheads.org/forum/viewtopic.php?p=7174850#p7174850 . I decided to find a real estate lawyer who would review and negotiate my agreement with an agent. Finding a lawyer was (is) next to impossible. In Washington, D.C., it is not required to use a RE lawyer and most people don't. Thus, there are no advertisements or other sources where I could look for a lawyer. A local publication Washingtonian has a lis...

Back in 2021 in response to another post similar to the OP’s here, I posted the following: “When I retired from NY State in 2010 at 59, DW was 58, I had the same decision on the payout from a retirement plan with no COLA. I chose the joint full option, 100% to DW if I die first. DW doesn’t have a pension of her own and didn’t have enough quarters for Social Security, so she gets spousal SS. Besides Medicare, DW will be able to get secondary health insurance through Empire Plan at the single retired employee price (Empire Plan also reimburses cost of Medicare). There are so many State employees in Albany where I worked, that John Hancock had a plan for using insurance products to “maximize” benefits. At my age, their plan said that I should...

yep. we use it through my employee benefit. it is good, in northern Virgnia, at least. wills, a family trust, consultation about financial matters. covers a lot and we find it well worth the monthly expense. If you’re creating a family trust presumably you expect to pay estate tax, in which case would that be appropriate? Yes. My wife’s employer (Emory University) offered it and we took advantage of it last year before she retired. We were very happy with the process and results. The MetLife website lets you choose a lawyer that is convenient to you and specializes in the service you need. We had both our wills re-written, POAs for both of us, and Advance Directives for Health Care. Also had a Revocable Trust established. These are not dis...

boringinvestor wrote: ↑Thu Mar 16, 2023 9:11 am My parents have a revocable trust setup decades ago to protect some assets and use them in retirement. ...

So now I am tasked with optimizing the portfolio in preparation that it gets inherited by myself and my siblings (outlined by the trust already).

...

Revocable trusts make sense in some cases (probably for them since if they have a single trust they're probably in California where revocable trusts are commonly used) and in some states, but they don't protect assets.

They may want to consider providing for you and your siblings in separate trusts that you each control rather than outright, to keep your inheritances out of your estates and protect against your creditors and spouses, and Medicaid.

The vast majority of the trusts I deal with are irrevocable.

I’m a trustee of one that has an account at Schwab and two that have accounts at Vanguard. A client is about to open one at Fidelity.

We’ve had software for this for many years.

jco wrote: ↑Wed Mar 15, 2023 8:21 am The parallels between OP's situation and my own are uncanny.

I am trying to help my wife file an extension for her S-Corp. She started her S-Corp in Q4.

We tallied up all income, expenses, what she paid herself (no W-2 or taxes withheld), and 1 charitable contribution. What I can't figure out is the Tentative Total Tax to use for the extension. If I have these numbers, how would we compute that? She's been trying to get hold of her accountant, and the meantime, none of my research online has been helpful.

How could a virgin S corporation owe any Federal income tax?

If there’s any doubt, send in an extension.

I had an accountant do a Form 1040-NR for a foreign estate. The accountant thought it was due June 15 but I thought it was due April 15. To avoid any doubt I sent in an extension.

They're not unusual. In most cases, the government shuts down a bank quickly enough that either the liquidation of the bank generates enough money to pay all or almost all of the uninsured deposits, or gets another bank to take it over and agree to make good on the uninsured deposits.

The decision to take a fee is a very personal one. If you do take a fee, it is income, so if you're the only beneficiary, it doesn't make any sense. Conversely, if there are 10 beneficiaries and a lot of work, maybe it makes sense. ... Are you talking about an annual fee or a one-time fee to settle the estate? While there are sometimes tax considerations, Lee is correct that it's generally a personal decision. In one estate, one child was the executor, and he wasn't going to take commissions, but then his siblings insisted on a formal accounting (which is expensive to prepare), and questioned an account payable to him for his children's education (when his mother had already paid for his siblings' children's education). He changed his mind...

This thread has convinced me to avoid naming any beneficiaries under the age of 18. The guardian / conservator thing happened in the estate of a family member. Ugh. Regards, Did it happen with a TOD IRA, trust or probated will? Probated will, with minors named in the will. Wills generally authorize the executors to distribute to a custodian under the UTMA. The problem arises with nonprobate assets, such as life insurance, retirement benefits, and personal injury and wrongful death payments. You can control how life insurance and retirement benefits will go, but some people don't name beneficiaries and some plans and IRAs default to the estate. We had a few cases involving decedents who were killed in the September 11th World Trade Center a...

HomeStretch wrote: ↑Sun Mar 12, 2023 10:19 am For a self-employed business earning $30k max annually owned by one person/no employees, S-Corp status seems overly complicated. Consider whether it makes sense to withdraw the election (IRS Form 8832) and change to a Sole Proprietorship (SP) for tax year 2023 where profits are reported on Schedule C on your Form 1040. With a SP, here is no need to run payroll or do a separate tax return on Form 1120 (which should reduce tax preparer fees) which should lower business expenses.

How can a corporation be a disregarded entity?

Another solution might be to liquidate the corporation, if there won't be much gain on the liquidation.

She should rely on her lawyer rather than her father's lawyer. In what state did the decedent live? About half the states, including New York, New Jersey, Florida and California, have statutory schedules for executors' commissions. In the other states, executors are entitled to reasonable compensation, which means that if the executors and beneficiaries can't agree, the court will decide. Whether to take some, all or none of the commissions to which she may be entitled is a personal decision given that she's a family member. The commissions are deductible for tax purposes. She may claim them either on the estate tax return or the fiduciary income tax returns (or some on each), but she can't claim the same amounts in both places. Her lawyer ...

Put it on extension. You can do that yourself.

"and has joint ownership of the house, some bank accounts, and is listed as beneficiary on most other accounts" So those assets transfer to her as the beneficiary and are not in the probate estate? (I do not know any NY law, but have a working knowledge of Virginia probate.) If they aren't part of the probate process then they aren't hit with the 2% fee. It’s whatever the law firm and the executor agree to. In the rare case where we might handle an estate on a percentage basis, we would probably want it to be a percentage of the gross estate for estate tax purposes. We have to value the nonprobate assets for the estate tax return in the same way as the probate assets, and there are sometimes issues and decisions regarding retirem...

... You probate the Will, not the assets. Unlike California, probating a Will in New York is generally not difficult, expensive or burdensome. The lawyer needs to know about the other assets since they may affect the decisions and the tax elections. The law firm should do the estate tax returns. Law firms with a good trusts and estates department do them regularly whereas others don’t. There are many legal judgments that go into an estate tax return. Law firms in California sometimes farm them out due to the percentage fee in California which means that they won’t get paid for the estate tax return, but that’s to the detriment of the client. Bsteiner, correct as always. As far as I have suffered, probate is entirely to the detriment of cli...

Probating a Will in New Jersey couldn’t be simpler. The court clerks will fill out the forms for you. After that, absent a dispute, you don’t have to deal with the court. Why are you concerned about it? Spouse wants to be as practical and efficient as possible, and is concerned that probate will be a nightmare, even for a small item like a motor vehicle. Both he (family member) and I have been NJ heirs to a few probated estates that have taken years to resolve, and were anything but simple. I understand this is a different situation and his fear may not be rational. You probate the Will, not the assets. Depending on the situation, it can take a while to administer an estate. Doing it well is more important than doing it quickly. The ones t...

What state? For example in California probate fees are a percentage of gross estate value and are set by statute. That's why "avoiding probate" is a big topic for California residents. New York. Just went through process to find and hire estate attorney in NY. I saw lots of attorneys who advertise a flat fee for a simple probate case. The court charges an asset % fee for probate assets, but if most assets are out of probate, no big deal. I am sure one can find flat, % or hourly attorneys if you look, but most seem to charge hourly or flat, so rather than find out why % of assets, find a different attorney. The court fee in New York is $1,250 (less for estates under $600,000). Stay away from the ones who advertise flat fees. That ...

The only assets that are not jointly held or in benefit to my mom are a residential rental property and shares in an LLC. Is 2% of the entire estate even remotely reasonable for what seems like very little work? Those are the only assets you would even discuss with a lawyer. Might get a second opinion on whether how to probate those 2 assets. Might also need a CPA (separately) if subject to estate taxes. I envy you. In CA suffering through a 3-year cluster nightmare which has so far cost $40K just for legal, plus appraisers, etc etc. For one condo and some bank accounts. You probate the Will, not the assets. Unlike California, probating a Will in New York is generally not difficult, expensive or burdensome. The lawyer needs to know about t...

Probating a Will in New Jersey couldn’t be simpler. The court clerks will fill out the forms for you. After that, absent a dispute, you don’t have to deal with the court.

Why are you concerned about it?